Small Business Owner and Community Banker Calls for Swift Approval of Credit Card Fair Fee Act
Owner of Convenience Store Chain and Part Owner of Bank Calls Swipe Fees ‘Suffocating’
For Immediate Release: April 28, 2010
Contact: Peter Mirijania
Washington, D.C. – In testimony today before the House Judiciary Committee, an owner of a chain of Iowa convenience stores and part owner of a large community bank, endorsed The Credit Card Fair Fee Act (H.R. 2695) to help provide relief to small businesses and consumers across the country in addressing the escalating costs of credit and debit card interchange or swipe fees that cost the U.S. economy $48 billion in 2008 alone.
Dave Carpenter, President of ShortStop and Member of the Board of Directors of Liberty Banshares, describes how spiraling swipe fees are severely impacting both merchants and community banks alike. “Because of my role as a retailer as well as a co-owner of a community bank, I am in the unique position of understanding the effect that runaway card fees have on convenience stores, as well as the negligible impact of payment card operations on community banks’ profitability. The interchange market isn’t free. It is rigged to guarantee big money for the largest banking institutions, leave banks like mine the leftovers from their feast (at best), and tighten the noose on businesses like ShortStop as much as they can without killing us (though sometimes it proves fatal),” Carpenter said.
He went on to illustrate how swipe fees are the highest cost of doing business after wages — higher than the cost of rent, utilities and healthcare for employees combined. “Overall for the ShortStop chain, interchange fees have grown more rapidly and significantly than all of our other expenses. And we cannot control interchange fees the way we can control other expenses,” Carpenter said.
Although Banshares issues Visa branded credit and debit cards, Carpenter argued, “I disagree with the contention that efforts to bring interchange fees under control will harm community banks. Right now, we compete with other banks for customers on the basis of price and service. But there is no price competition on interchange fees,” Carpenter said.
Carpenter also noted that the National Association of Convenience Stores (NACS), “delivered a petition with more than 2 million signatures from our customers asking Congress to create transparency and competition for swipe fees. This is on top of the 1.7 million signatures 7-Eleven delivered last year, bringing the total to 3.7 million Americans who have taken time from their busy day to sign a petition asking Congress to act. We and our customers hope Congress is listening”.
Douglas Kantor, counsel to the Merchants Payments Coalition (MPC), also testified and lauded Chairman John Conyers (D-MI) and Rep. Bill Shuster (R-PA) for co-sponsoring the legislation that would allow merchants to collectively bargain with credit card companies over interchange rates. “It is, in fact, interesting that the card companies and bankers oppose this bill so strenuously. Why shouldn’t merchants have the right to act collectively in the way the banks do already? There is nothing in the bill that says the banks couldn’t try to negotiate a better deal than they have now on interchange. Of course, they must realize there is no way for them to justify the size of the fees they charge and the anticompetitive rules they impose,” Kantor said.
The Merchants Payments Coalition is a group of retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses who are fighting against unfair credit card fees and fighting for a more competitive and transparent card system that works better for consumers and merchants alike. The coalition’s member associations collectively represent about 2.7 million stores with approximately 50 million employees.
For more information about credit card swipe fees, please visit http://www.UnfairCreditCardFees.com.
###